Pocono News Section

Boscov's Rescue Package

Boscov's Rescue Package - Thursday, November 20, 2008 at 5:51PM EST

Thursday, Nov 20, 2008 @ 05:51pm EST

A rescue package to save the Boscovs department store chain is in place

After the company filed for bankruptcy this summer.

A nearly 300 million dollar plan will likely save the stores, and thousands of jobs

The state is lending the company 35 million.

The cities of Wilkes-Barre and Scranton are lending 3 million dollars a piece.

The Boscov family and private investors will make up the rest.

It's a package mayors said they had no problem supporting.

Wilkes-Barre mayor Tom Leighton didn't think twice about helping a troubled Boscov's department store chain.

"It was not a hard decision. Mr. Boscov has been a tremendous friend to the city of Wilkes-Barre and the Wyoming Valley . He is the main anchor and he is part of this revitalization of downtown," said Mayor Leighton.

That's why Mayor Leighton gave the green light to lend 3 million to the company.

The money comes from a community development block grant.

It's federal money available to loan out for business growth.

Mayor Leighton said, "Is it taxpayer's money? Yes. Any money the city receives is taxpayer's money. But it's not general fund money, it's economic development funding that we are allowed to use in a crisis like this. And again, I'm very happy that we're in a situation that we can assist Mr. Boscov in keeping Boscov's open."

Scranton mayor Chris Doherty says he was also onboard since rescue talks started.

“I knew, from our perspective it's a good investment to make," said Mayor Doherty.

Boscov's anchors the Mall at Steamtown here in Scranton .

Roughly 1000 people work here.

Mayor Doherty says the ripple effect from Boscov's closing would be awful.

"It's good for the city of Scranton to do this deal. Because the alternative would be, we'd have a tremendous hole in our downtown," said Mayor Doherty.

The city of Scranton is also lending federal money to Boscov's.

Like Wilkes-Barre , it's a loan available from a federal block grant designed to stimulate job growth.

But both mayors agree, saving Boscov's would do just that.

The Boscov's loan from the city of Wilkes-Barre and Scranton has to be approved by city council's first.

Then, it needs to be approved be federally approved.